Author: admin_gst

ADJUSTMENT OF GST PAID IN WRONG HEAD
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 22-11-2018

In payment of tax it is usual to pay the tax in the wrong head. The service tax provisions in such scenario allow the assessee to get the refund of tax paid in the wrong head but the assessee is to pay tax in the correct head. There was no self adjustment of tax paid in the wrong head to the correct head or by the Department. The said problem also is available in GST provisions.
In 'S. Saji v. The Commissioner, SGST and others' – 2018 (11) TMI 954 – Kerala High Court, the petitioner purchased certain goods from Tamil Nadu. While in transit of the said goods to Kerala the Authorities retained the goods and issued the demand of tax to the petitioners. The consignor of the petitioners paid the tax under SGST along with the penalty based on the directions of the Authority. The petitioner showed to the Authorities the receipt as evidence of tax and penalty. T

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e tax paid mistakenly under one head instead of another.
* Rule 4 speaks of adjustment.
* Where the amount of refund is completely adjusted against any outstanding demand under the Act, an order giving details of the adjustment is to be issued in Part A of FORM GST RFD-07.
* The petitioner's counsel lays stress on this process of adjustment and asserts that the amount remitted under one head can be adjusted under another head, for the demand can be any amount under the Act.
The High Court found no difficulty for the respondent officials to allow the petitioner's request and get the amount transferred from the head 'SGST' to 'IGST'. It may, as the Government Pleader has contended, take some time, but it is inequitable for the authorities to let the petitioner suffer on that count. The High Court directed the Revenue the 2nd respondent to release the goods forthwith along with the vehicle and, then, ensure that the tax and penalty already stood remitted under

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terest on the amount of central tax and State tax or, as the case may be, the central tax and the Union territory tax payable.
Section 77(1) provides the situation in which the assessee paid the tax the CGST and SGST or CGST and UTGST on the hope that it is an intra-State supply. But the said supply is later held to be inter-State supply which attracts the payment of IGST. Here the payment of tax in the wrong head is on the genuine hope that it is an intra-State supply. In such cases the service tax paid as SGST shall be refunded to the assessee in such manner and subject to such conditions as may be prescribed. But the assessee is to pay IGST.
Section 77(2) provides the situation which is reverse to section 77(1). In this situation the assessee considered the transaction as inter-State supply and paid integrated tax but subsequently it is held as intra-State supply which attracts the payment of CGST and SGST. In this case also there is no adjustment of tax from one head to another.

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giving details of the adjustment shall be issued in Part A of FORM GST RFD-07. This Rule may be wrongly quoted as Rule 4(1) of GST Refund Rules, 2017.
Rule 92 (1) authorizes the Revenue to adjust the tax, if any, outstanding, against the refund payable to the assessee. It does not amount to adjustment of tax paid in the wrong head to the correct head.
However the judgment of the High Court is a welcome one since it is beneficial to the assessees. The GST Council is also to consider to make rule on the adjustment of tax paid in the wrong head to the correct head in line with the judgment of the High Court, Kerala.
Reply By Durga Prasad as =
Dear Sir,
as sec 77(1) doesn't specify whether interest to be paid or not on such Liability unlike sec 77(2) where it clearly mentions that "without payment of interest", so what should we imply from that ? shall we needs to pay interest on the same or not ?
Thanking you sir.
Dated: 24-6-2019
Reply By kollengode venkitaraman a

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DECODING GST ANNUAL RETURN -GSTR-9
By: – Chitresh Gupta
Goods and Services Tax – GST
Dated:- 22-11-2018

The Goods & Services Tax has been implemented from July 1, 2017. It has brought about a paradigm shift in the methodology of levy and collection of taxes.
GST is a transaction based Indirect tax where returns are filed periodically. It may be monthly or quarterly depending on the type of assessee or type of Return. The concept of Annual return in transaction-based tax is not new. It was prevalent in Central statutes like Excise Act in the form ER-4, 5 & 7. In  Service Tax also,annual return was proposed vide notification no. 19/2016-ST dated 01.03.2016, however on account of implementation of GST, the format of the annual return was not notified. The annual return was also prevalent in various State based VAT Acts.  This required assessee to consolidate the information relating to Sale, Purchase including Input Tax Credit claimed in return and file the

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year.
Type of Return
Assessee liable to file Annual Return
GSTR 9
Filed by the regular taxpayers filing GSTR 1, GSTR 2, GSTR 3.
GSTR 9A
Filed by the persons registered under composition scheme under GST.
GSTR-9B
Filed by the e-commerce operators who have filed GSTR 8
GSTR-9C
Reconciliation Statement duly certified by CA or ICWA to be filed by the taxpayers, whose annual turnover exceeds Rs  2 crores during the financial year. This needs to be filed along with annual return and audited financial statement.
Implication for Delayed/ Non Filing of Annual Return
As per proviso to section 47(2), any registered person who fails to furnish the return required under section 44 [annual return] by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent of his turnover in the State or Union territory. The la

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s earlier
VI
Other Information
PART I: BASIC DETAILS
Part I seeks to capture the basic details of the Registered Person. The details to be provided are as under;
1
Financial Year
2
GSTIN
3A
Legal Name
3B
Trade Name (if any)
The Financial year will be 2017-18. However, since GST has been implemented from July 01,2017, the data in the Annual Return will relate to period of July 2017 to March 2018. The GSTIN, Legal Name and Trade name as appearing in GST REG-06 is to be mentioned.
It may be noted that Annual return need to be filed for each GSTIN separately. Thus, if a multi-locational entity has 20 GSTIN, then 20 separate Annual return need to be filed. In case an entity has more than one GSTIN in the same state either due to separate business vertical or SEZ unit etc, separate annual return shall be filed.
PART II: DETAILS OF OUTWARD AND INWARD SUPPLIES DECLARED DURING THE FINANCIAL YEAR
This part specifically provides the consolidated view of Outward Supplies made by Re

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on which tax is to be paid on reverse charge basis
H
Sub-total (A to G above)
I
Credit Notes issued in respect of transactions specified in (B) to (E) above (-)
J
Debit Notes issued in respect of transactions specified in (B) to (E) above (+)
K
Supplies / tax declared through Amendments (+)
L
Supplies / tax reduced through Amendments (-)
M
Sub-total (I to L above)
N
Supplies and advances on which tax is to be paid (H + M) above
An important point to note here is that GSTR-9 will contain only the data as declared in already filed returns by registered person. This is in contrast with the Annual return as filed under VAT regimes where the modification if any in the return was carried out in Annual return. The same option is not available in GSTR-9.
Another point for discussion is that at the time of preparation of GSTR 9, whether the details required to be reported at Part 4 should be:
1. Restricted to details reported in the GSTR 1 for the period July 2017 to March 201

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n which tax is not liable to be paid in Table 5.  These include;
A
Zero rated supply (Export) without payment of tax
B
Supply to SEZs without payment of tax
C
Supplies on which tax is to be paid by the recipient on reverse charge basis
D
Exempted
E
Nil Rated
F
Non-GST supply
G
Sub-total (A to F above)
H
Credit Notes issued in respect of transactions specified in A to F above (-)
I
Debit Notes issued in respect of transactions specified in A to F above (+)
J
Supplies declared through Amendments (+)
K
Supplies reduced through Amendments (-)
L
Sub-Total (H to K above)
M
Turnover on which tax is not to be paid  (G + L above)
N
Total Turnover (including advances) (4N + 5M – 4G above)
It may be noted that Debit notes and credit notes which are in relation to these supplies should be captured only if the suitable effect of GST is provided in them. Any commercial/accounting credit or debit notes which do not contain the charge of GST should not be adjuste

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m registered persons liable to reverse charge (other than B above) on which tax is paid and ITC availed
Inputs
Capital Goods
Input Services
E
Import of goods (including supplies from SEZs)
Inputs
Capital Goods
F
Import of services (excluding inward supplies from SEZs)
G
Input Tax credit received from ISD
H
Amount of ITC reclaimed (other than B above) under the provisions of the Act
I
Sub-total (B to H above)
J
Difference (I – A above)
K
Transition Credit through TRAN-I (including revisions if any)
L
Transition Credit through TRAN-II
M
Any other ITC availed but not specified above
N
Sub-total (K to M  above)
O
Total ITC availed (I +  N above)
The above table specifically provides reconciliation of total credit as availed under GSTR-3B with various sources of ITC like Inward supplies from Registered person, Unregistered person, Imports, ISD etc, We also need to disclose the transition credit as filed under TRAN-I & TRAN-II.
The practical issue in co

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equires the details of ITC which is declared as Ineligible or reversed on account of Rule 37, 39, 42 & 43
Rule
Description
37
Reversal of input tax credit in the case of non-payment of consideration
39
Reversal of Excess Credit by  Input Service Distributor
42
Reversal of ITC in respect of inputs or input services  on account of Exempt & Non Taxable supply
43
Reversal of ITC in respect of Capital Goods on account of Exempt & Non- Taxable supply
The details required under Table 7 are as under;
A
Reversal of ITC as per Rule 37
B
Reversal of ITC as per Rule 39
C
Reversal of ITC as per Rule 42
D
Reversal of ITC as per Rule 43
E
Ineligible ITC as per section 17(5)
F
Reversal of TRAN-I credit
G
Reversal of TRAN-II credit
H
Other reversals (pl. specify)
I
Total ITC Reversed (A to H above)
J
Net ITC Available for Utilization (6O – 7I)
In respect of Rule 37, where ITC is required to be reversed on account of  non -payment of consideration within 18

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2018-19
Table 12
ITC Reversed by mistake and  also re-availed that ITC in 2018-19
ITC Reversed in Table 12 and re-availed ITC in Table 13
Table 8 gives a bird eye view presentation of GSTR-2A reconciliation with ITC availed. It also computes the total ITC which will be lapsed in the current financial year. Following details are required in Table 8;
A
ITC as per GSTR-2A (Table 3 & 5 thereof)
B
ITC as per sum total of 6(B) and 6(H) above
C
ITC on inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs) received during 2017-18 but availed during April to September, 2018
D
Difference [A-(B+C)]
E
ITC available but not availed (out of D)
F
ITC available but ineligible (out of D)
G
IGST paid on import of goods (including supplies from SEZ)
H
IGST credit availed on import of goods (as per 6(E) above)
I
Difference (G-H)
J
ITC available but not availed on import of goods (Equal to I)
K
Total ITC to

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g credit. Hence, it is stressed that working sheets must be prepared on the basis of ledger accounts/ invoice to determine and find out the exact cause of difference for initiation of remedial action either on the part of registered person or on part of suppliers of registered person.
ITC which is unavailed in GSTR-3B either on account it is ineligible or even though it was available but due to mistake, it was not claimed, it will get lapsed. Only the ITC available and not availed coming from 8E, 8F and 8J has been directed to be lapsed. ITC on reverse charge including ITC on import of service is not being reported in Table 8 and hence not being lapsed under Table 8. Merely because the said credits are not being subject to reporting purposes in Table 8 does not mean that the said credit would not lapse, if the said credit is not availed within the timelines set out in section 16(4) of CGST Act,2017.
PART IV: DETAILS OF TAX PAID AS DECLARED IN RETURNS FILED DURING THE FINANCIAL YEAR

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;               –  
 
Central Tax
                        –  
                        –  
                        –  
 
                        –  
 
State/UT Tax
                        –  
            &nb

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         –  
                        –  
 
 
 
 
Late fee
                        –  
                        –  
 
 
 
 
Penalty
                        –  
                        –  
 
 
 
 
Other
     &n

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ar
Information required in this clause is of 'tax payable' and 'tax paid' (by cash or credit). Reference is given to Table 6.1 of GSTR 3B to collect information and include it here. Table 6.1 of GSTR 3B also contains 'tax payable' and 'tax paid'. It is opined that 'actual tax paid' alone must be obtained from that Table and reported in this clause. As regards 'tax payable', the same must be in alignment with taxable turnover in Sl.No.4, particular 4M of GSTR 9. And if 'tax payable' were to be reproduced from GSTR 3B, then there would mere repetition of information without any occasion to rectify later in GSTR 9C.
Accordingly, where taxable turnover reported in GSTR 1 and GSTR 3B are in agreement with each other, there would be no 'new' tax liability being identified for the first time in GSTR 9. However, where they are not in agreement, which is often the case, taxable turnover reported in GSTR 1 and that on which tax is actually discharged through GSTR 3B may not be in agreement. It

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eturns for the months of April 2018 to September 2018
* Amendments to invoices related to 2017-18 and reported (with errors) in the GSTR 1 for 2017-18 but now reported (duly rectified) in the returns for the months of April 2018 to September 2018
* ITC availed & reversed pertaining to FY 2017-18 but reported in GSTR 3B of April 2018 to September 2018
It may be noted that Debit notes / Credit notes dated after April 1,2018 will not be reported in GSTR 9 of FY 2017-18 because the circumstances necessitating credit note and debit note would have arisen only in 2018-19.
PART VI: OTHER INFORMATION
Part VI requires following information to be provided by Registered person
15
Particulars of Demands and Refunds during FY 2017-18
16
Information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis
17
HSN Wise Summary of outward supplies
18
HSN Wise Summary of Inward supplies
19
Late fee payable and paid
Table 15 requi

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ssed in GST RFD-07 by way of adjustment of the amount of refund against the outstanding demand under the GST, then, the demand of tax before adjustment against refund of tax will form part of reporting under under the table 15E, demand of taxes.
Table 16 of GSTR 9 requires details of supplies received from composition tax payers supplies (inputs and capital goods) received from principal by the recipient (job-worker) and not returned within the time specified under section of the CGST Act,2017 and supplies received on approval basis from principal and returned to supplier within 180 days of supply.
For the financial year 2017-18, a summary of inward and outward supplies effected / made against a particular HSN code is to be reported in this Table17 & Table 18 respectively. It is optional to mention HSN code for taxpayers having annual turnover up to Rs. 1.50 crores. It will be mandatory to report HSN code at two digits level for taxpayers having annual turnover in the preceding year

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ation of ITC with GSTR-2A specifically in cases where ITC claimed in returns is higher than ITC as reflected in GSTR-2A.
* Collation of data with respect to HSN wise Inward & Outward Supplies made during the year.
It is recommended that the government may appreciate that above issues and relook the format of Annual Return to be make it more compliance friendly. It is also recommended that all the registered person and also the professionals may start the work on Annual Return so that everybody may get sufficient time to complete the same and take care of various intricacies involved in filing the same.
Reply By ARUN JAIN as =
Very helpful and detailed article
Dated: 24-11-2018
Reply By Jitender Ranka as =
NOTE FOR OPINION ON ITEMS NOT SHOWN IN GSTR1 BUT ADJUSTED IN GSTR3B
There are various issues in current GST laws and one issues arises from a deviation from earlier GST provision in treating general discounts in trade (which are related to many invoices) as sales promotion i

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ght on how to treat it in annual return:
* 1. Can the distributor show the input GST without adjusting GST in credit notes? If done so it results in sizeable refund. 2. Will GST authorities refund big amount immediately? If agreed to do so company is going to debit distributor immediately.
* Can distributor show the annual return as it is that is input GST after adjusting GST in credit notes(which he has been doing in 3B) so there would not be any refund. Then can Auditor under GST audit show the Input GST detailed computation by showing the input GST on purchases and input GST reversed on account of credit notes of company and giving all details of credit notes for period from 1st July 17 to 31st March 18. Can this become basis for FMCG company to claim out put reversal which they can show in their audit report as well.
NOTE FOR OPINION ON ITEMS NOT SHOWN IN GSTR1 BUT ADJUSTED IN GSTR3B
There are various issues in current GST laws and one issues arises from a deviation from earl

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of credit notes of company(supplier) not coming through GSTR1 return and only adjusted in 3B.
Now the opinion is sought on how to treat it in annual return:
* 1. Can the distributor show the input GST without adjusting GST in credit notes? If done so it results in sizeable refund. 2. Will GST authorities refund big amount immediately? If agreed to do so company is going to debit distributor immediately.
* Can distributor show the annual return as it is that is input GST after adjusting GST in credit notes(which he has been doing in 3B) so there would not be any refund. Then can Auditor under GST audit show the Input GST detailed computation by showing the input GST on purchases and input GST reversed on account of credit notes of company and giving all details of credit notes for period from 1st July 17 to 31st March 18. Can this become basis for FMCG company to claim out put reversal which they can show in their audit report as well?
Dated: 22-12-2018
Scholarly articles fo

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M/s Maa Mundeshwari Traders Versus Union of India And 3 Others
GST
2018 (11) TMI 1346 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 22-11-2018
Writ Tax No. – 1476 of 2018
GST
Pankaj Mithal And Ashok Kumar JJ.
For the Petitioner : Aloke Kumar
For the Respondent : C.S.C., A.S.G.I.
ORDER
The petitioner is purchasing dealer of Bihar. The goods purchased by him under transportation has been seized along with vehicle on 12.11.2018. The goods have been directe

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M/s. TMT GRANITES (PVT) LTD. Versus THE COMMISSIONER STATE GST DEPARTMENT, KERALA, TRIVANDRUM, THE DEPUTY COMMISSIONER OF STATE TAX STATE GST DEPARTMENT, PALAKKAD, THE ASSISTANT COMMISSIONER (ASSESSMENT), PALAKKAD AND THE STATE OF KERALA REPRESENTED BY ITS SECRETARY (TAXES DEPARTMENT), THIRUVANANTHAPURAM
VAT and Sales Tax
2018 (11) TMI 1360 – KERALA HIGH COURT – 2019 (26) G. S. T. L. 327 (Ker.)
KERALA HIGH COURT – HC
Dated:- 22-11-2018
WP (C). No. 31159 of 2018
CST, VAT & Sales Tax
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADV. SRI. PHILIP J. VETTICKATTU
For The Respondent : ADV. GOVERNMENT PLEADER
JUDGMENT
Introduction:
Mining and quarrying, as we know, are related, yet distinct activities. One concerns the major minerals, and the other minor minerals. One involves the prospecting or extracting, the other mere excavation. Their semantic nuances apart, can we treat “quarrying” as an act of “mining”? We will answer.
Facts:
2. TMT Granites (Pvt.) Ltd

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also the Kerala Minor Mineral Concession Rules, 2015.
5. Sri Vettickattu has taken pains to explain that the fuel consumed for the machinery and the motor vehicles must alike be treated as the goods enjoying the tax benefit under Section 8 of the CST Act. To support his contentions he has relied on Indian Copper Corporation Ltd., v. Commissioner of Commercial Taxes AIR 1965 SC 891, J.K. Cotton Spinning and Weaving Mills Co., Ltd., v. Sales Tax Officer AIR 1965 SC 1310, Bihar Mines Ltd., v. Union of India AIR 1967 SC 887, All Kerala River Protection Council v. State of Kerala 2015 (2) KLT 78, D.K. Trivedi and Sons v. State of Gujarat AIR 1986 SC 1323.
6. Dr.Thushara James, the learned Government Pleader, on the other hand, has strenuously contended that the mining and quarrying are entirely different activities. According to her, the Government grants mining permit, whereas the Department of Geology grants quarrying permit. She has also submitted that mining concerns itself with major

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judgments concerned themselves either with the permits granted, mostly, for mining. So those judgments, she asserts, could be distinguished. In the end, she urges the Court to dismiss the writ petition.
9. Heard Sri Philip J. Vettickattu, the learned counsel for the petitioner, and Dr. Thushara James, the learned Government Pleader. Discussion:
10. The petitioner-Company, a registered dealer under the KVAT Act and the Central Sales Tax Act, 1956, has been engaged in quarrying and crushing of granite metals. It uses several items of machinery and motor vehicles for its quarrying operations. It claims that the machinery and the motor vehicles are “integrally connected” with its business. For its machinery and vehicles, the Company uses HSD Oil as fuel. As the Company needs huge quantities of oil, Hindustan Petroleum Corporation has allowed it to have its own filling station.
11. So the Company Wanted to take advantage of Section 8 of the CST Act. For that purpose, the Company wanted

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he goods referred to in sub-sec. (1), ”
(a)[* * * * * *]
(b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture of processing of goods for sale or in the telecommunications network, or in mining or in the generation or distribution of electricity or any other form of power;
. . .
(italics supplied)
13. From the above provision, we can gather that a dealer gets a tax concession. To get that concession, it must fulfill certain conditions: (a) the dealer must be dealing in inter-State trade or commerce, (b) it must be selling to registered dealers goods as described in sub-section (3), and (c) it must be paying tax under the CST Act. These conditions fulfilled, the dealer can pay tax at “three per cent of its turnover or at the rate applicable to the sale or purcha

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underground excavation formed in the roof, or fault, for obtaining material for pack walls.
16. The same lexicon defines “mining” as the science, technique, and business of mineral discovery and exploitation. Strictly, “the word connotes underground work directed to severance and treatment of ore or associated rock. Practically, it includes opencast work, quarrying, alluvial dredging, and combined operations, including surface and underground attack and ore treatment.”
17. The Shorter Oxford English Dictionary defines “quarry” as an open-air excavation from which stone for building, etc., is or has been obtained by cutting, blasting, etc. Any place from which stone may be extracted. The same dictionary defines “mine” as an excavation or a system of excavations in the earth for the extraction of metal, metallic ore, coal, salt, etc. Lexically, true, both “quarrying” and “mining” are distinct activities with different objectives. But the question is, does this distinction survive legis

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57, deals with the “Declaration as to the expediency of Union control”: in the public interest the Union should control and regulate the mines and develop the minerals to the extent provided in the Act. Then, Section 3(aa) inclusively defines “minerals”: all minerals except mineral oils qualify under the definition.
21. Section 3 (c) defines “mining lease”. It is a lease granted “for the purpose of undertaking mining operations, and includes a sub-lease granted for such purpose.” And, under Section 3(d), “mining operations” means any operations undertaken for winning any mineral. Indeed, under Section 15 of that Act, the State Government has the power to regulate the minor minerals. It may regulate the grant of “quarry leases, mining leases, or other mineral concessions” in respect of minor minerals and for purposes connected therewith.
22. Rule 2 (xvi) of the Kerala Minor Minerals Concession Rules 2015 defines “quarrying lease” to mean a mining lease for minor minerals granted under

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legislative history and also the federal distribution of powers on the subject: mining. Referring to the States' powers, it observes that under Section 15(1) of the 1957 Act various State Governments have made rules in respect of minor minerals. Although these rules vary from State to State, there are certain broad features present in all of them. The majority of States provide for two types of mineral concessions: a lease on tenure basis and a permit to extract a specified quantity of a minor mineral. In all the States, the rules provide for the grant of a lease for a particular term, varying from one year to twenty years. These leases are variously described in different State rules as “mining lease”, “quarrying lease” and “quarry lease”, and are similar to the mining leases granted under the Mineral Concession Rules, 1960.
26. Then, D.K. Trivedi has paid particular attention to the Gujarat Minor Mineral Rules, in the statutory backdrop of Section 15(2). The term “minerals”, as we h

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) of Section 3, “mining lease”, among other things, means “a lease granted for the purpose of undertaking mining operations”. Under Clause (d) of Section 3, the expression “mining operations” means “any operations undertaken for the purpose of winning any mineral”. “Quarry”, we have already seen, is to excavate stone for building, etc. by cutting, blasting, or the like. Relying on the lexical meaning of quarrying, D.K. Trivedi has emphatically held that “quarrying minerals is, therefore, a mining operation inasmuch as it consists of an operation undertaken for the purpose of winning particular classes of minerals.”
28. Then, D.K. Trivedi refers to Clause (vi) of Rule 2 of the Gujarat Rules. That Rule defines “quarry lease” as “a kind of mining lease in respect of a minor mineral granted under these rules.” In this context, we will, here, examine Rule 2 (xvi) of the Kerala Minor Mineral Concession Rules, 2015. It is, in fact, in para materia with the Gujarat Rule: “Quarrying Lease” mea

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he petitioner Company is a dealer under Section 8 of the CST Act. That assertion admits of no contradiction. But the Company claims benefits under Section 8 of the CST Act. The question is whether the fuel it uses for its machinery and vehicles qualifies for that benefit, as we now accept that the Company is in mining activity.
31. The goods referred to in clause (b) of sub-section (3) of Section 8, which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel, or lubricants, in the manufacture or processing of in the telecommunications network or in mining, or in the generation or distribution of electricity or any other form of power.
32. In Indian Copper Corporation Limited, the petitioner applied to the tax authorities for registration as a dealer under the Central Sales Tax Act, setting out a list of goods for specification in the certificate of reg

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ning operations and in the manufacturing process – the two processes being interdependent – it would be impossible to exclude vehicles which are used for removing from the place where the mining operations are concluded to the factory where the manufacturing process starts. It appears that the process of mining ore and manufacture with the aid of ore copper goods is an integrated process and there would be no ground for exclusion from the vehicles those which are used for removing goods to the factory after the mining operations are concluded. Nor is there any ground for excluding locomotives and motor-vehicles used in carrying finished products from the factory. The expression “goods intended for use in the manufacturing or processing of goods for sale” may ordinarily include such vehicles as are intended to be used for removal of processed goods from the factory to the place of storage.
34. In J.K. Cotton Spinning and Weaving Mills, the Supreme Court has followed Indian Copper Corp

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without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the process or activity as specified in Rule 13 will qualify for special treatment. This is not to say that every category of goods “in connection with” manufacture of or “in relation to” manufacture, or which facilitates the conduct of the business of manufacture will be included within Rule 13. Attention in this connection may be invited to a judgment of this Court in which it was held that vehicles used by a Company (which mined ore and turned out copper in carrying on activities as a miner and as manufacturer) fell within Rule 13, even if the vehicles were used merely for removing ore from the mine to the factory, and finished goods from the factory to the place of storage. Spare parts and accessories required for the effective operation of those vehicles were also held to fall within Rule 13.”
35. Veering back to the facts, I may observe that t

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M/s Raj Kamal Healthcare Pvt. Ltd. Versus Union Of India And 3 Others
GST
2018 (11) TMI 1412 – ALLAHABAD HIGH COURT – 2019 (20) G. S. T. L. 6 (All.)
ALLAHABAD HIGH COURT – HC
Dated:- 22-11-2018
Writ Tax No. – 1435 of 2018
GST
Pankaj Mithal And Ashok Kumar JJ.
For the Petitioner : Nishant Mishra,Vipin Kumar Kushwaha
For the Respondent : A.S.G.I.,Aditya Bhushan Singhal,C.S.C.
ORDER
The GST has been made applicable on premium paid on lease of property by virtue of Section 7 read with Schedule II of the Good and Service Tax Act, 2017 (in short of the Act). The two notifications no. 12 of 2017 and 32 of 2017 issued in exercise of powers under Section 11 (1) of the Act exempt service tax on one time upfront amount leviab

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2 of 2017 is exempt.
Even though the aforesaid Advance Ruling is final and conclusive, respondent no. 3 has issued notice dated 24.8.2018 for payment of GST on the premimum for leasing out of the plot allotted to the petitioner for the purposes of hospital, nursing home, diagnostic centeres etc.
Sri Aditya Bhushan Singhal, learned counsel appearing for respondent no. 3 Sri C.B. Tripathi, Special counsel appearing for respondent 3 as well as learned counsel for Union of India and the learned Standing counsel for the State of U.P., all are directed to file counter affidavit within a month. Two weeks thereafter are allowed to the petitioner to file rejoinder affidavit.
List for admission/final disposal on the expiry of the above period.
Un

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Corrigendum in Haryana Government, Excise and Taxation Department, Notification No. 99/GST-2, dated 06.11.2018.
101/GST-2 Dated:- 22-11-2018 Haryana SGST
GST – States
Haryana SGST
Haryana SGST
HARYANA GOVERNMENT
EXCISE AND TAXATION DEPARTMENT
Corrigendum
The 22nd November, 2018
No.101/GST-2.- In the Haryana Government, Excise and Taxation Department, notification No. 99/GST-2, dated the 6th November, 2018, in page 3527, in line 13, for “furnish an application to the effect”, r

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M/s Timexo Fasteners India Private Ltd. And Another Versus State Of U.P. And 3 Others
GST
2018 (11) TMI 1504 – ALLAHABAD HIGH COURT – 2019 (20) G. S. T. L. 3 (All.) , [2019] 63 G S.T.R. 314 (All)
ALLAHABAD HIGH COURT – HC
Dated:- 22-11-2018
Writ Tax No. – 1471 of 2018
GST
Pankaj Mithal And Ashok Kumar JJ.
For the Petitioner : Rajan Tripathi
For the Respondent : C.S.C.
ORDER
The petitioner no. 1 is a registered dealer of Kanpur in U.P. It purchased fencing wire 5.11.2018 from the Sharp Engineers, Delhi. The delivery of the fencing wire so purchased by it was to be delivered at Kanpur.
Accordingly, the invoice/builty was generated on 5.11.2018 wherein GST @ 18% was charged and paid. The goods were dispatched from Delhi through transport on 5.11.2018 along with e-way bill which was valid upto 12 p.m. of 10.11.2018.
It is alleged that the Truck Vehicle No. UP 78/ CN 5278 carrying the said consignment had left Delhi on 5.11.2018 and had reached Kanpur along with

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itioners aggrieved by the aforesaid order have preferred this petition contending that the very basis of the seizure of the goods is non existing as at the time of interception of the goods e-way bill accompanying the goods was very much valid and that only on account of delay in the issue of the memo of seizure, the time mentioned in the e-way bill expired. The seizure memo incorrectly mentions the time of interception of the goods.
In view of the above, to test and ascertain as to when actually the goods were intercepted, Sri C.B. Tripathi, Special counsel appearing for the respondents was given time on 20.8.2018 to seek instructions as to the time when the vehicle in question had entered Kanpur and was actually intercepted notwithstanding the issuance of the seizure memo on 11.11.2018.
Sri C.B. Tripathi has obtained instructions in the matter from the Assistant Commissioner (Commercial Tax) Incharge MS-XI, Kanpur. The instructions disclose that the e-way bill accompanying the good

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ncharge MS-IX, Kanpur do not match with the documents which has been produced by none other than the Assistant Commissioner which clearly states that the vehicle was intercepted at 8:23 am on 11.11.2018 at Jarib Chowki Kanpur. The instructions states that the interception/checking was done at 12.30 in the night of 10.11.2018.
The averments regarding the entry of vehicle in Kanpur and the intercepting of goods as made in the writ petition have not been countered by the official of the department through the above instructions. It only states that the vehicle was checked at 12:30 in the night of 10.11.2018 at Jarib Chowki, Kanpur without uttering a single word as to when the vehicle is said to have been entered Kanpur Nagar despite fact that the specific direction was issued to the respondent to seek instructions about it.
In view of the above scenario, it can not be said that the allegation of the petitioners that the vehicle had entered Kanpur much before expiry of time mentioned in

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Amendments to MGST Act, 2017 [L. A. BILL No. LXXI OF 2018. Dt. 22-11-2018]
L.A. BILL No. LXXI OF 2018 Dated:- 22-11-2018 Maharashtra SGST
GST – States
Maharashtra SGST
Maharashtra SGST
In pursuance of clause (3) of article 348 of the Constitution of India, the following translation in English of the Maharashtra Goods and Services Tax (Amendment) Bill, 2018 (L. A. Bill No. LXXI of 2018), introduced in the Maharashtra Legislative Assembly on the 22nd November 2018, is hereby published under the authority of the Governor.
By order and in the name of the Governor of Maharashtra,
RAJENDRA G. BHAGWAT,
Secretary (Legislation) to Government,
Law and Judiciary Department.

L. A. BILL No. LXXI OF 2018.
A BILL
further to amend the Maharashtra Goods and Services Tax Act, 2017.
WHEREAS both Houses of the State Legislature were not in session ;
AND WHEREAS the Governor of Maharashtra was satisfied that circumstances existed which rendered it necessary for him to take immedia

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erence to the coming into force of that provision.
Amendment of section 2 of Mah. XLIII of 2017.
2. In section 2 of the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017.) (hereinafter referred to as the “principal Act”),
(a) in clause (4), for the words “the Appellate Authority and the Appellate Tribunal” the words, brackets and figures, “the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171” shall be substituted ;
(b) in clause (16), for the words “Central Board of Excise and Customs” the words “Central Board of Indirect Taxes and Customs” shall be substituted ;
(c) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely :-
“(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and”;
(d) clause (18) shall be deleted ;
(e) in clause (35), for the word, brackets and letter “clause (c)”

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r sub-section (1), the following sub-section shall be inserted and shall always be deemed to have been inserted, namely :
“(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.”;
(c) in sub-section (3), for the words, brackets and figures “sub-sections (1) and (2)” the words, brackets, figures and letter “sub-sections (1), (1A) and (2)” shall be substituted.
Amendment of section 9 of Mah. XLIII of 2017.
4. In section 9 of the principal Act, for sub-section (4), the following subsection shall be substituted, namely:
“(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such

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en per cent. of turnover in the State in the preceding financial year or five lakh rupees, whichever is higher.”;
(b) in sub-section (2), for clause (a), the following clause shall be substituted, namely:
“(a) save as provided in sub-section (1), he is not engaged in the supply of services;”.
Amendment of section 12 of Mah. X
6. In section 12 of the principal Act, in sub-section (2), in clause (a), the words, brackets and figure “sub-section (1) of” shall be deleted.
Amendment of section 13 of Mah. XLIII of 2017.
7. In section 13 of the principal Act, in sub-section (2), the words, brackets and figure “sub-section (2) of “, at both the places where they occur, shall be deleted.
Amendment of section 16 of Mah. XLIII of 2017.
8. In section 16 of the principal Act, in sub-section (2),
(a) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:-
“Explanation.-For the purposes of this clause, it shall be deemed that the registered person has re

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ule.”;
(b) in sub-section (5), for clauses (a) and (b), the following clauses shall be substituted, namely:-
“(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
(aa) vessels and aircraft except when they are used
(i) for making the following taxable supplies, namely:-
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provi

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istered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply ;
(ii) membership of a club, health and fitness centre; and
(iii) travel benefits extended to employees on vacation such as leave or home travel concession :
Provided that, the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.”.
Amendment of section 20 of Mah. XLIII of 2017.
10. In section 20 of the principal Act, in the Explanation, in clause (c), for the words and figures “under entry 84” the words, figures and letter “under entries 84 and 92A” shall be substituted.
Amendment of section 22 of Mah. XLIII of 2017.
11. In section 22 of the principal Act, –
(a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely:-
“Provided further that,

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–
“Provided further that, a person having a unit, as defined in the Special Economic Zones Act, 2005, (28 of 2005.) in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State.”;
(b) in sub-section (2), for the proviso, the following proviso shall be substituted, namely:
“Provided that, a person having multiple places of business in the State may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.”.
Amendment of section 29 of Mah. XLIII of 2017.
14. In section 29 of the principal Act,
(a) in the marginal note, after the word “Cancellation” the words “or suspension” shall be inserted ;
(b) in sub-section (1), after clause (c), the following proviso shall be inserted, namely:-
“Provided that, during pendency of the proceedings relating to cancellation of reg

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more debit notes for supplies made in a financial year” shall be substituted.
Amendment of section 35 of Mah. XLIII of 2017.
16. In section 35 of the principal Act, in sub-section (5), the following proviso shall be inserted, namely :-
“Provided that, nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”.
Amendment of section 39 of Mah. XLIII of 2017.
17. In section 39 of the principal Act,
(a) in sub-section (1),-
(i) for the words “in such form and manner as may be prescribed” the words “in such form, manner and within such time as may be prescribed” shall be substituted ;
(ii) the words “on or before the twentieth day of the month succeeding such calendar month or part thereof” shall be

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n the proviso, for the words “the end of the financial year” the words “the end of the financial year to which such details pertain” shall be substituted.
Insertion of section 43A in Mah. XLIII of 2017.
18. After section 43 of the principal Act, the following section shall be inserted, namely :-
Procedure for furnishing return and availing input tax credit.
“43A. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax cred

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es of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for nonrecovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,-
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.”.
Amendment of section 48 of Mah. XLIII of 2017.
19. In section 48 of the principal Act, in sub-section (2), after the word and figures “section 45” the words “and to perform such other functions” shall be inserted.
Amendment of section 49 of Mah. XLIII of 2017.
20. In section 49 of the principal Act,
(a) in sub-section (2), for the word and fi

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contained in section 49, the input tax credit on account of State tax shall be utilised towards payment of integrated tax or State tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.
Order of utilization of input tax credit.
49B. Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.”.
Amendment of section 52 of Mah. XLIII of 2017.
22. In section 52 of the principal Act, in sub-section (9), for the word and figures “section 37” the words and figures “section 37 or section 39” shall be substituted.
Amendment of section 54 of Mah. XLIII of 2017.

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ion (4) or, as the case may be, sub-section (5) of section 25. “.
Amendment of section 107 of Mah. XLIII of 2017.
25. In section 107 of the principal Act, in sub-section (6), in clause (b), after the words “arising from the said order,” the words “subject to a maximum of twenty-five crore rupees,” shall be inserted.
Amendment of section 112 of Mah. XLIII of 2017.
26. In section 112 of the principal Act, in sub-section (8), in clause (b), after the words “arising from the said order,” the words “subject to a maximum of fifty crore rupees,” shall be inserted.
Amendment of section 129 of Mah. XLIII of 2017.
27. In section 129 of the principal Act, in sub-section (6) and in the proviso, for the words “seven days”, the words “fourteen days” shall be substituted.
Amendment of section 143 of Mah. XLIII of 2017.
28. In section 143 of the principal Act, in sub-section (1), in clause (b), after the proviso, the following proviso shall be inserted, namely :-
“Provided further that, the p

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before clearance for home consumption;
(b) supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.”;
(ii) the existing Explanation shall be renumbered as Explanation 1 and after Explanation 1 as so renumbered, the following Explanation shall be inserted, namely:-
“Explanation 2.-For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962. (52 of 1962.)”.
Repeal of Mah. Ord. XXII of 2018 and saving.
32. (1) The Maharashtra Goods and Services Tax (Amendment) Ordinance, 2018, (Mah. Ord.XXII of2018.) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken (including any notification or order issued) under the corresponding provisions of the principal Act, as amended by the said Ordinance, shall be deem

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difficulties, it was proposed to amend the Maharashtra Goods and Services Tax Act, 2017, suitably.
3. The then proposed Amendments, inter alia, provided for the following, namely:-
(i) to amend section 7 of the Act, so as to clarify the scope of supply ;
(ii) to amend section 9 of the Act, for empowering the State Government to notify the classes of registered persons for paying the tax on reverse charge basis, in respect of receipt of supplies of certain specified categories of goods or services or both, from the unregistered suppliers ;
(iii) to amend section 10 of the Act, so as to enhance the limit of composition levy from one crore rupees to one crore and fifty lakh rupees ;
(iv) to amend section 17 of the Act, so as to specify the scope of input tax credit ;
(v) to amend section 22 of the Act, in view of the enhancement in the exemption limit for registration in the special category States from ten lakh rupees to twenty lakh rupees ;
(vi) to amend section 25 of the Act, s

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ircumstances existed which rendered it necessary for him to take immediate action further to amend the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017), for the purposes aforesaid, the Maharashtra Goods and Services Tax (Amendment) Ordinance, 2018 (Mah. Ord. XXII of 2018), was promulgated by the Governor of Maharashtra on the 13th October 2018.
5. The Bill is intended to replace the said Ordinance by an Act of the State Legislature.
SUDHIR MUNGANTIWAR,
Minister for Finance.
Mumbai,
dated the 19th November 2018.
MEMORANDUM REGARDING DELEGATED LEGISLATION
The Bill involves the following proposals for delegation of legislative power, namely :-
Clause 1(3).-Under this clause, power is taken to the State Government, to bring into force the provisions of the Act by notification in the Official Gazette, and appoint different dates for different sections.
Clause 13.-Under this clause, power is taken to the State Government to prescribe, by rules, the procedure for a

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GST on Residential programmes or camps meant for advancement of religion, spirituality or yoga by religious and charitable trusts.
47/2018 Dated:- 22-11-2018 West Bengal SGST
GST – States
GOVERNMENT OF WEST BENGAL
DIRECTORATE OF COMMERCIAL TAXES
14, BELIAGHATA ROAD, KOLKATA-700015
TRADE CIRCULAR No. 47/2018 (Circular No. 66/40/2018-GST)
DATED: 22.11.2018
Subject: GST on Residential programmes or camps meant for advancement of religion, spirituality or yoga by religious and charitable trusts.
Certain representations have been received seeking clarification as regards applicability of GST on residential programmes or camps meant for advancement of religion, spirituality or yoga where the fee charged includes the cost of boardin

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all also be exempt as long as the primary and predominant activity, objective and purpose of such residential programmes or camps is advancement of religion, spirituality or yoga. However, if charitable or religious trusts merely or primarily provide accommodation or serve food and drinks against consideration in any form including donation, such activities will be taxable. Similarly, activities such as holding of fitness camps or classes such as those in aerobics, dance, music etc. will be taxable”.
3. It is accordingly clarified that taxability of the services of religious and charitable trusts by way of residential programmes or camps meant for advancement of religion, spirituality or yoga may be decided accordingly.
4. Difficulty if a

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Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16
48/2018 Dated:- 22-11-2018 West Bengal SGST
GST – States
GOVERNMENT OF WEST BENGAL
DIRECTORATE OF COMMERCIAL TAXES
14, BELIAGHATA ROAD, KOLKATA-700015
TRADE CIRCULAR No. 48/2018 (Circular No. 69/43/2018-GST)
DATED: 22.11.2018
Subject: Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16.
The Commissioner is in receipt of representations seeking clarifications on various issues in relation to processing of the applications for cancellation of registration filed by taxpayers in FORM GST REG-16. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations (i.e. jurisdictional officers), the Commissioner, in exercise of its powers conferred by section 168 (1) of the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as the “WBGST Act”), hereby clarifies the issue

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icult in some cases to exactly identify or pinpoint the day on which such an event occurs. For instance, a business may be transferred/disposed over a period of time in a piece meal fashion. In such cases, the 30-day deadline may be liberally interpreted and the taxpayers' application for cancellation of registration may not be rejected because of the possible violation of the deadline.
4. While initiating the application for cancellation of registration in FORM GST REG-16, the Common portal captures the following information which has to be mandatorily filled in by the applicant:
a) Address for future correspondence with mobile number and email address;
b) Reason for cancellation;
c) Date from which cancellation is sought;
d) Details of the value and the input tax/tax payable on the stock of inputs, inputs contained in semi-finished goods, inputs contained in finished goods, stock of capital goods/plant and machinery;
e) In case of transfer, merger of business, etc., particulars

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r merge has not got registered with the tax authority before submission of the application for cancellation.
In all cases other than those listed at (a) and (b) above, the application for cancellation of registration should be immediately accepted by the proper officer and the order for cancellation should be issued in FORM GST REG-19 with the effective date of cancellation being the same as the date from which the applicant has sought cancellation in FORM GST REG-16. In any case the effective date cannot be a date earlier to the date of application for the same.
6. In situations referred to in (a) or (b) in para 5 above, the proper officer shall inform the applicant in writing about the nature of the discrepancy and give a time period of seven working days to the taxpayer, from the date of receipt of the said letter, to reply. If no reply is received within the specified period of seven working days, the proper officer may reject the application on the system, after giving the appli

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hin three months of the effective date of cancellation or the date of order of cancellation, whichever is later. The purpose of the final return is to ensure that the taxpayer discharges any liability that he/she may have incurred under sub-section (5) of the section 29 of the WBGST Act. It may be noted that the last date for furnishing of FORM GSTR-10 by those taxpayers whose registration has been cancelled on or before 30.09.2018 has been extended till 31.12.2018 vide notification No. 1540-F.T., dated the 30th October, 2018.
8. Further, sub-section (5) of section 29 of the WBGST Act, read with rule 20 of the WBGST Rules states that the taxpayer seeking cancellation of registration shall have to pay, by way of debiting either the electronic credit or cash ledger, the input tax contained in the stock of inputs, semi-finished goods, finished goods and capital goods or the output tax payable on such goods, whichever is higher. For the purpose of this calculation, the stock of inputs, se

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output tax liability of the taxpayer, as determined under sub-section (5) of section 29 of the WBGST Act, was greater than the amount of input tax credit available, then the difference shall be paid by him/her in cash. It is reiterated that, as stated in sub-section (3) of section 29 of the WBGST Act, the cancellation of registration does not, in any way, affect the liability of the taxpayer to pay any dues under the GST law, irrespective of whether such dues have been determined before or after the date of cancellation.
9. In case the final return in FORM GSTR-10 is not filed within the stipulated date, then notice in FORM GSTR-3A has to be issued to the taxpayer. If the taxpayer still fails to file the final return within 15 days of the receipt of notice in FORM GSTR-3A, then an assessment order in FORM GST ASMT-13 under section 62 of the WBGST Act read with rule 100 of the WBGST Rules shall have to be issued to determine the liability of the taxpayer under sub-section (5) of sectio

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e CGST Act has been amended by the CGST (Amendment) Act, 2018 to provide for “Suspension” of registration. The intent of the said amendment is to ensure that a taxpayer is freed from the routine compliances, including filing returns, under GST Act during the pendency of the proceedings related to cancellation. Although the provisions of CGST (Amendment) Act, 2018 have not yet been brought into force, it will be prudent for the field formations not to issue notices for non-filing of return for taxpayers who have already filed an application for cancellation of registration under section 29 of the WBGST Act. However, the requirement of filing a final return, as under section 45 of the WBGST Act, remains unchanged.
12. It may be noted that the information in table in FORM GST REG-19 shall be taken from the liability ledger and the difference between the amounts in Table 10 and Table 11 of FORM GST REG-16.
13. Difficulty, if any, in implementation of the above instructions may please be

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Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor.
50/2018 Dated:- 22-11-2018 West Bengal SGST
GST – States
GOVERNMENT OF WEST BENGAL
DIRECTORATE OF COMMERCIAL TAXES
14, BELIAGHATA ROAD, KOLKATA-700015
TRADE CIRCULAR No. 50/2018 (Circular No. 71/45/2018-GST)
DATED: 22.11.2018
Subject: Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor
Representations have been received seeking clarification on certain issues under the GST laws. The same have been examined and the clarifications on the same are as below:
S.No.
Issue
Clarific

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ht be available to such taxable person.
2.
As per section 27 of the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act), period of operation by causal taxable person is ninety days with provision for extension of same by the proper officer for a further period not exceeding ninety days. Various representations have been received for further extension of the said period beyond the period of 180 days, as mandated in law.
1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CTP and thus such person would be required to obtain registration as a normal taxable person.
2. While applying for normal registration the said person

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the WBGST Act resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest and penalty if any.
2. The recipient unit(s) who have received excess credit from ISD may deposit the said excess amount voluntarily along with interest if any by using FORM GST DRC-03.
3. If the said recipient unit(s) does not come forward voluntarily, necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 or 74 of the WBGST Act as the case may be. FORM GST DRC-07 can be used by the tax authorities in such cases.
4. It is further clarified that the ISD would also be liable to a general penalty under the provi

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Scope of principal and agent relationship under Schedule I of WBGST Act, 2017 in the context of del credere agent.
52/2018 Dated:- 22-11-2018 West Bengal SGST
GST – States
GOVERNMENT OF WEST BENGAL
DIRECTORATE OF COMMERCIAL TAXES
14, BELIAGHATA ROAD, KOLKATA-700015
TRADE CIRCULAR No. 52/2018 (Circular No. 73/47/2018-GST)
DATED: 22.11.2018
Subject: Scope of principal and agent relationship under Schedule I of WBGST Act, 2017 in the context of del credere agent.
Post issuance of Trade Circular No. 40/2018 dated 17th September, 2018, various representations have been received from the trade and industry, as well as from the field formations (i.e. jurisdictional officers) regarding the scope and ambit of principal agent relationship under GST in the context of del credere agent (hereinafter referred to as “DCA”). In order to clarify these issues and to ensure uniformity of implementation across field formations (i.e. jurisdictional officers), the Commissioner, in exercise of

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mself and recovering the amount from the buyer with some interest at a later date. This loan is to be repaid by the buyer along with an interest to the DCA at a rate mutually agreed between DCA and buyer. Concerns have been expressed regarding the valuation of supplies from Principal to recipient where the payment for such supply is being discharged by the recipient through the loan provided by DCA or by the DCA himself. Issues arising out of such loan arrangement have been examined and the clarifications on the same are as below:
Sl.No.
Issue
Clarification
1.
Whether a DCA falls under the ambit of agent under Para 3 of Schedule I of the WBGST Act?
As already clarified vide circular No. 40/2018 dated 17th September, 2018, whether or not the DCA will fall under the ambit of agent under Para 3 of Schedule I of the WBGST Act depends on the following possible scenarios:
* In case where the invoice for supply of goods is issued by the supplier to the customer, either himself or thro

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nt on Principal to Principal basis and is an independent supply.
Therefore, the interest being charged by the DCA would not form part of the value of supply of goods supplied (to the buyer) by the supplier. It may be noted that vide notification No. 1135-F.T. dated 28th June, 2017 (Sl. No. 27), services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) has been exempted.
3.
Where DCA is an agent under Para 3 of Schedule I of the WBGST Act and makes payment to the principal on behalf of the buyer and charges interest to the buyer for delayed payment along with the value of goods being supplied, whether the interest will form a part of the value of supply of goods also or not?
In such a scenario following activities are taking place:
1. Supply of goods by the supplier (principal) to the DCA;
2. Further supply of goods by the DCA to the recipient;
3. Sup

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In Re: M/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPKVVCL)
GST
2019 (1) TMI 418 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2019 (20) G. S. T. L. 810 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – AAR
Dated:- 22-11-2018
Order No. 19/2018 Case No. 20/2018
GST
RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER
Present on behalf of applicant: Shree Anil Kumar, Authorized Representative
PROCEEDINGS
(Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017)
1. The present application has been filed u/s 97 of the Central Goods & Services Tax Act. 2017 and MP Goods & Services Tax Act, 2017 (hereinafter also referred to CGST Act and MPSGT Act respectively) by M/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (hereinafter also referred to as applicant), registered under the Goods & Services Tax.
2. The provisions of the CGST Act and MPGST Act are identica

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received after the due date mentioned in bills is liable to pay delay payment charges.
4. QUESTION RAISED BEFORE THE AUTHORITY –
Whether applicant is eligible to avail the exemption from the levy of GST under Entry no. 25 of notification 12/2017- Central Tax (Rate) Dated 28/06/2017 bearing description 'Transmission or Distribution of electricity by an electricity transmission or distribution of electricity utility' with respect to the Delay Payment Charges recovered by the applicant from its consumers.
4.2 If answer of Question no. 1 is negative then what will be the applicable rate of tax and HSN/SAC code for Delayed Payment Charges.
5. DEPARTMENT'S VIEW POINT –
The concerned officer, The Joint Commissioner CGST and Central Excise Hqrs. jabalpur submitted that as per section 15(2)(d) of CGST Act, 2017 the value of supply shall include interest or late fees or penalty for delayed payment of any consideration for any supply. Further, as per the advance ruling authority

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on the company. The Madhya Pradesh Electricity Regulatory Authority (MPERC) is an Independent Authority fix rates of supply of power in the State of Madhya Pradesh.
6.4. The MPERC exercises the powers conferred by section 50 of the Electricity Act, 2003 for framing rules and regulations to frame Madhya Pradesh Electricity Supply Code,2013 same is reproduced under-
The State Commission shall specify an electricity supply code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity; measures for preventing tampering, distress or damage to electrical plant, or electrical line or meter, entry of distribution licensee or   any person acting on his behalf for disconnecting supply and removing the meter; entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters.
6.5. In addition to the en

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the bill as Surcharge on Outstanding Amount or Late Payment Surcharge.
6.8 EXEMPTION NOTIFICATION FOR TRANSMISSION AND DISTRIBUTION OF ELECTRICITY BY UTILITY-
A. Electricity Transmission and Distribution Services –
1. Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 –
As per Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 the activity of Transmission or distribution of electricity by an electricity transmission or distribution utility is NIL rate of GST-
Sl.No.
Service Code (Tariff) or SAC Code
Description of Services
Rate (per cent.)
Condition
25
Heading 9969
Transmission or distribution of electricity by an electricity transmission or distribution utility.
Nil
Nil
Further, the definition given under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 is as under –
“electricity transmission or distribution utility” means the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a Sta

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or SAC code
Description of Services
Rate (per cent.)
Condition
13
Heading 9969
Electricity, gas, water and other distribution service.
9
 
Being general clause at S.No. 13 Notification No. 11/2017- Central Tax (Rate) dated 28th June, 2017 applicable in cases of electricity distribution services provided by the person other than electricity transmission and distribution utility.
Since, the applicant is covered in the definition of electricity transmission and distribution utility and there is specific exemption for such class of person under Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017, therefore, in the instant case the distribution and transmission of electricity services provided by the applicant is exempted.
6.10 Electrical Energy-
As per Notification No. 2/2017- Central Tax (Rate) dated 28th June, 2017 the electrical energy as a goods had been exempted from GST.
Sl. No.
Chapter/Heading/Sub-heading/Tariff item
Description of Goods
104
2716

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i. Application fee for releasing connection of electricity;
ii. Rental Charges against metering equipment;
iii. Testing fee for meters/ transformers, capacitors etc.;
iv. Labour charges from customers for shifting of meters or shifting of service lines;
v. charges for duplicate bill;
Provided by DISCOMS to consumer are taxable.
Thus vide above circular it is clarified that the, not all the services of the DISCOMS are exempted.
7. ADVANCE RULLING ISSUED BY THE RAJASTHAN AUTHORITY OF ADVANCE RULING and appeal order on the issue by THE RAJASTHAN APPELLATE AUTHORITY OF ADVANCE RULING GST
7.1 Rajasthan authority of advance ruling, GST vide order no. RAJ/AAR/2018-19/02, Dated 11/05/2018 = 2018 (6) TMI 1196 – AUTHORITY FOR ADVANCE RULING – RAJASTHAN issued ruling on the same matter in case of M/s. TP Ajmer Distribution Limited (TPADL). The authority in the instant case provide ruling in case of Delay Payment Charges as under –
“As per Section 15(2)(d) of the CGST Act, 2017-
15(

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the Rajasthan Appellate Authority for Advance Ruling, GST as mentioned above is relevant in the instant case as it is the common practice amongst the electricity distribution Companies to recover the delay payment charges from the consumers in case of delay in payment. Further, the nature of income in the case of applicant and TPADL is same.
8. DISCUSSION AND FINDINGS:
The issue raised by the applicant and the material on record are discussed below-
8.1 Vide Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act,2017 and Notification No. 2/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act, 2017 both the activity of distribution & Transmission and retail supply of Electricity by the applicant is exempted.
8.2 Further, Vide Circular No. 34/8/2018-GST, Dated 01st March 2018, it had been clarified that exemption granted under Notification No. 12/2017- Central Tax (Rate)

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e actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.
(2) The value of supply shall include
(a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier;
(b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both;
(c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at t

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as mentioned above as per the ruling of Rajasthan Appellate Authority for Advance Ruling. GST the Delay Payment Charges is exempted as the value of main supply i.e., electricity is exempted.
Attention is drawn towards fact the applicant is recovering delay payment charges not only towards supply of electrical energy as goods, supply Transmission/distribution of electricity service as an electricity distribution utility which are exempted, but also towards charges like metering charges and others which are taxable as per Circular No. 34/8/2018-GST, Dated – 01st March 2018.
Thus, in the instant case the supply in question is set of both, exempted (i.e., distribution & Transmission, retail supply of Electricity) and taxable supply (i.e., the other services as per circular no. 34/8/2018- GST, dated – 01st March, 2018).
Therefore, based on the above facts it can be concluded that the Delayed payment surcharge cannot be treated as separate service and same shall be included in the value

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In Re: M/s. Madhya Pradesh Pashchim Kshetra Vidyut Vitaran Company Limited
GST
2019 (1) TMI 419 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2019 (20) G. S. T. L. 793 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – AAR
Dated:- 22-11-2018
Order No. 20/2018 Case No. 15/2018
GST
RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER
Present on behalf of applicant: Shree Shree Anirudh Tiwari, Accounts Officer
PROCEEDINGS
(Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017)
1. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and MP Goods & Services Tax Act, 2017 (hereinafter also referred to CGST Act and MPSGT Act respectively) by M/s. Madhya Pradesh Pashchim Kshetra Vidyut Vitaran Company Limited (hereinafter also referred to as applicant), registered under the Goods & Services Tax.
2. The provisions of the CGST Act and MPGST Act are identical,

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istribution of electricity in the area of Indore and Ujjain Commissionerate. Besides, the Applicant company is also performing function of Rural Electrification including distribution of electricity.
3.3 The term 'Government Entity' has been defined vide Notification No.32/2017- Central Tax (Rate) dtd.13.10.2017, as '………. an authority or a board or any other body including a society, trust, corporation (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority'.
3.4. Further, vide Notification No.02/2018-CT (Rate) dtd.25.01.2018 following amendments have been made in the Notification no. 12/2017-CT (Rate) dtd.28.06.2017 –
(a) Against Serial number 3, in the Entry in Column (3), after the words 'a Governmental Authority' the words 'or a Government Entity&#3

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plicable to the applicant company.
4. QUESTION RAISED BEFORE THE AUTHORITY –
4.1 Applicability of provisions of S.No.3 & 3A of Table oft Notification No. 12/2017 dtd.28.06.2017 as amended from time to time on services supplied to the company (As mentioned in Sr. No. 14 of the Application).
5. RECORD OF PERSONAL HEARING- Shree Anirudh Tiwari, Accounts Officer Appeared for personal hearing on 06.07.18 and they reiterated the submission already made in the application.
6. DISCUSSION AND FINDINGS –
6.1. At the outset, we are inclined to observe that the Applicant has failed to articulate a specific question before us. What has been mentioned in Sr.No.14 of the Application, wherein the Applicant is required to mention the question(s) on which Advance Ruling is sought, is merely 'Applicability of provisions of S.No.3 & 3A of Table of Notification no. 12/2017 dtd.28.06.2017and corresponding notification issued under MPGST Act, 2017 as amended from time to time on services supplied to t

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We further observe that vide Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act,2017 and Notification No. 2/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act,2017, both the activities of distribution & Transmission and retail supply of Electricity by the applicant are exempted. Hence there is no ambiguity about these activities.
6.4. We find from the application that the Applicant has made a specific mention of Sr. No.3A to notification no. 12/2017, which provides NIL rate of GST for composite supply of goods and services where the value of supply of goods constitute not more than 25% of the value of composite supply provided to the Central government or state government etc. by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution. However, we do not find any specific mention of services in this context in t

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Commissioner of GST & Central Excise Chennai Versus M/s. The EIMCO KCP Ltd.
Central Excise
2019 (2) TMI 79 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-11-2018
Appeal No. E/264/2012 – Final Order No. 43019/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri L. Nandakumar, AC (AR) for the Appellant
Shri M.N. Bharathi, Advocate for the Respondent
ORDER
Per Bench
Brief facts are that the respondents are engaged in manufacture of filtration equipment falling under CETSH 84212190 of CETA, 1985. On scrutiny of records for the months of December 2007 to May 2008, it was found that they had cleared filtration equipment without payment of duty claiming exemption under Sl. No. 91of Notification No.6/2006-CE dated 1.3.2006 for supply against International Competitive Bidding. As it appeared that the exemption was available only to M/s. VA-Tech Wabag Ltd., as they were the actual bidders and the

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ts of International Competitive Bidding, M/s. VA-Tech Wabag Ltd. has participated in the international competitive bidding and the project authorities M/s. NTPC has issued certificate to M/s. VA Tech Wabag Ltd. The respondent is a sub-contractor as seen from the certificate issued by the project authority and therefore the goods supplied by the respondent would satisfy Condition 19 of the said Notification. The issue is decided in the following cases:-
a. Commissioner of Customs, Mumbai Vs. Rochem Separation Systems Ltd. Ltd. – 2010 (251) ELT 438
b. Commissioner of Central Excise, Puducherry Vs. Caterpillar India Ltd. – 2013 (297) ELT 8 (Mad.) upheld by the Hon'ble Supreme Court in 2016 (335) ELT A27 (SC)
c. Kanta Rubber Pvt. Ltd. Vs. Commissioner of Customs – 2017 (353) ELT 124
d. Toshniwal Industries Pvt. Ltd. Vs. Commissioner of Central Excise, Jaipur – 2017 (5) GSTL 179.
4. Heard both sides.
5. The respondents have supplied the goods for water treatment plant for human consum

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in fact supplied to such power project and the equipments were installed at the project site. What we noticed is that neither the benefits under Notification No. 21/2002-Cus. (Sr. No. 400) nor the exemption under Notification No. 6/2006-C.E. (Sr. No. 91) is subject to any conditions stipulated in Foreign Trade Policy. BHEL as the main contractor could have imported the impugned goods without payment of Customs duty in view of Notification No. 21/2002-Cus. (Sr. No. 400). Notification No. 6/2006-C.E. Sr. No. 91 only makes it possible to procure such goods locally without payment of excise duty if BHEL so desires and BHEL opted for local procurement from the assessee-appellants. So, naturally the assessee-appellants should be eligible for exemption under Notification No. 6/2006-C.E. (Sr. No. 91). Prima facie, the deemed export benefits dealt within para 8.6.1 and 8.6.2 deal with incentive granted by DGFT and not exemption granted by Ministry of Finance and there is no reason to refer to

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M/s. Priya Constructions Versus Commissioner of GST & Central Excise Chennai South Commissionerate
Service Tax
2019 (2) TMI 89 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-11-2018
ST/Misc. /41492/2017 in ST/257/2011 – Final Order No. 43021/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri S. Venkatachalam, Advocate for the Appellant
Shri L. Nandakumar, AC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are rendering services under the category of Construction of Commercial Residential Complex. On intelligence it was found that the assessees are providing taxable service without obtaining service tax registration and without payment of service tax. The department took up investigation and on verification of records, it was noticed that the appellant took up a joint development agreement with M/s. ABU Estates Pvt. Ltd. In terms of the agreement, the land was

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ainable as the activity undertaken by the appellant falls under the category of works contract service involving execution of composite contracts. Therefore, the entire demand of service tax under the category of commercial or industrial construction service is unsustainable. He also submitted that the issue is covered by the decision of the Tribunal in the case of Real Value Promoters Ltd. Vs. CCE – 2018-TIOL-2867-CESTAT, Chennai.
3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order.
4. After hearing both sides, it is brought to light that the period involved in the present case is from 10.9.2004 to 31.10.2008. The demand has been raised in the show cause notice under construction of complex services. The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. (supra) had occasion to analyse the issu

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construction service, construction of complex service and in addition turnkey projects including EPC projects within the definition of Works Contract Service.
7.9 At this juncture, it is worthwhile to reproduce excerpts from the Union Finance Minister's budget speech in 2007:-
“State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract”.
7.10 The issue was analyzed by the Hon'ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of ser

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gant' – 'general things do not derogate special things'. The counsel for appellants have submitted that as per Section 65A of the Act ibid, classification of service shall be based on the specific entries and the more specific description of service has to be preferred. He invited our attention to CBEC's Circular 128/10/2010 dated 24.8.2010 which is reproduced as under:-
“The matter has been examined. As regards the classification, with effect from 1-6-2007 when the new service 'Works Contract service' was made effective, classification of aforesaid services would undergo a change in case of long term contracts even though part of the service was classified under the respective taxable service prior to 1-6-2007. This is because 'works contract' describes the nature of the activity more specifically and, therefore, as per the provisions of Section 65A of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date.”
7.12 Thus

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ntion this in the first para itself. However, the proposal for tax demand was specifically made under Commercial or Industrial Construction Service under Section 65 (105) (zzq) of the Finance Act, 1994. In such situation, we note that it cannot be a case of simple mentioning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L&T Limited. Even in the appeal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section 65(105) (xxq). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity.”
b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai – 2018-TIOL-360-CESTAT-MUM, in respect of identical i

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the facts that the contracts executed by the appellant are nothing but works contracts, for the period in question, entire case of the Revenue in the show-cause notice stands demolished by the Apex Court in the case of Larsen & Toubro Ltd. (supra). In the said judgment, their Lordships have very categorically laid down the law that the works contract cannot be vivisected for the confirmation of demand under various other services. On this ground itself, the entire demand confirmed by the adjudicating authority is liable to be set aside and we do so.”
c. In the case of URC Construction (P) Ltd. Vs. Commissioner of Central Excise, Salem – 2017 (50) STR 147, the Tribunal in paragraphs 9, 10 and 11 has held as under:-
“9. The Hon'ble Supreme Court in re Larsen & Toubro & Ors. has decided thus
'24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to com

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ntract the value of properly in goods transferred in the execution of a works contract.'
10. In view of this specific decision and the admitted claim of the appellant that they are not providers of 'commercial or industrial construction service' but of 'works contract service', no tax is liable on construction contracts executed prior to 1st June, 2007.
11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering 'works contract service'. On the contrary, the submission of the appellant that they had been providing 'works contract service' had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than 'commercial or industrial construction servic

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not under Works Contract service. The demand confirmed in the impugned order under these categories namely under construction service for the period 10.09.2004 to 16.06.2005 under CICS for the period 16.06.2005 to 30.09.2008 cannot also sustain and are therefore set aside. So ordered
5.3 For the period 01.04.2008 to 30.09.2008, the demand confirmed is Rs. 26,88,611/-. We note that the appellant has not contested the liability under works contract for this period. The only argument brought forth by the Ld. Counsel is that they have discharged an amount of around Rs. 82 lakhs under this category after the visit of the departmental officers and therefore an amount of Rs. 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of Rs. 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the off

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iter.
c. For activities of construction of new building or civil structure or new residential complex etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under 'Works Contract Service' as defined under section 65(105)(zzzza) ibid.
d. The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under 'Commercial or Industrial Construction Service' or 'Construction of Complex' Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS / CCS for the periods also after 1.6.2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain.”
5. Following the above decision, we are of the considered opinion that the demand of service tax under com

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M/s. Yes & Yes Hi-Tech Promoters India P. Ltd. Versus Commissioner of GST & Central Excise Salem
Service Tax
2019 (2) TMI 90 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-11-2018
Appeal No. ST/127/2011 – Final Order No. 43017/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Ms. Kanthi Visalakshi, Advocate for the Appellant
Ms. T. Usha Devi, DC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are rendering services under the category of 'Commercial and Industrial Construction Service', Construction of Residential Complex Service', 'Works Contract Service and services under the category of Transport of Goods by Road. Show cause notice was issued to the appellant on the ground that they have not furnished the relevant records to the department for verification of the correctness of the service tax paid by them for the period September 2004 to September 2008. Short p

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Promoters Ltd. Vs. CCE – 2018-TIOL-2867-CESTAT, Chennai. She also submitted that the appellants are not contesting the demand under Goods Transport Agency Service.
4. The ld. AR Ms. T. Usha Devi supported the findings in the impugned order.
5. After hearing both sides, it is brought to light that the period involved in the present case is September 2004 to September 2008. The demand has been raised in the show cause notice under construction of complex services. The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. (supra) had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories o

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in 2007:-
“State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract”.
7.10 The issue was analyzed by the Hon'ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65(105)(zzzza) i.e. Works Contract Services. As pointed out by the ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which w

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He invited our attention to CBEC's Circular 128/10/2010 dated 24.8.2010 which is reproduced as under:-
“The matter has been examined. As regards the classification, with effect from 1-6-2007 when the new service 'Works Contract service' was made effective, classification of aforesaid services would undergo a change in case of long term contracts even though part of the service was classified under the respective taxable service prior to 1-6-2007. This is because 'works contract' describes the nature of the activity more specifically and, therefore, as per the provisions of Section 65A of the Finance Act, 1994, it would be the appropriate classification for the part of the service provided after that date.”
7.12 Thus, for example, while construction of a new residential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) Explanation (c). For

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oning of wrong provisions of law as submitted by the Revenue. Apparently, the tax liability of composite works contract is to be considered under works contract services only as per legal position settled by the Hon'ble Apex Court in M/s L&T Limited. Even in the appeal, the Revenue submitted that the respondent were engaged in construction services liable to tax under tax entry Section 65(105) (xxq). The grievance of the Revenue is with reference to commercial nature of the construction undertaken by the respondent and not on the correct classification of taxable activity.”
b. In the case of Skyway Infra Projects Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai – 2018-TIOL-360-CESTAT-MUM, in respect of identical issue for the period from 2005 to 2012, the Tribunal in para 7 has held as under:-
“7. On careful consideration of the submissions made by both the sides, we find that the issue falls for consideration is whether the services rendered by the appellant in respect of 52

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, their Lordships have very categorically laid down the law that the works contract cannot be vivisected for the confirmation of demand under various other services. On this ground itself, the entire demand confirmed by the adjudicating authority is liable to be set aside and we do so.”
c. In the case of URC Construction (P) Ltd. Vs. Commissioner of Central Excise, Salem – 2017 (50) STR 147, the Tribunal in paragraphs 9, 10 and 11 has held as under:-
“9. The Hon'ble Supreme Court in re Larsen & Toubro & Ors. has decided thus
'24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines “taxable service” as “any service provided”. All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as f

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service', no tax is liable on construction contracts executed prior to 1st June, 2007.
11. Insofar as demand for subsequent period till 30th September, 2008 is concerned, it is seen that neither of the two show cause notices adduce to leviability of tax for rendering 'works contract service'. On the contrary, the submission of the appellant that they had been providing 'works contract service' had been rejected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than 'commercial or industrial construction service'. It is already established in the aforesaid judgment of the Hon'ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the

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de. So ordered
5.3 For the period 01.04.2008 to 30.09.2008, the demand confirmed is Rs. 26,88,611/-. We note that the appellant has not contested the liability under works contract for this period. The only argument brought forth by the Ld. Counsel is that they have discharged an amount of around Rs. 82 lakhs under this category after the visit of the departmental officers and therefore an amount of Rs. 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of Rs. 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered.”
8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the ca

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ction 65(105)(zzzza) ibid.
d. The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under 'Commercial or Industrial Construction Service' or 'Construction of Complex' Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS / CCS for the periods also after 1.6.2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain.”
6. Following the above decision, we are of the considered opinion that the demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007. The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. – 201

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M/s. P.S. Vinod Versus Commissioner of GST & Central Excise Chennai
Service Tax
2019 (2) TMI 91 – CESTAT CHENNAI – 2019 (24) G. S. T. L. 50 (Tri. – Chennai)
CESTAT CHENNAI – AT
Dated:- 22-11-2018
Appeal No. ST/124/2011 – Final Order No. 43020/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri J. Shankarraman, Advocate for the Appellant
Ms. T. Usha Devi, DC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that during internal audit of the Audit Section, it was noticed that the appellant who is a proprietor of the concern has been rendering photography service as an individual professional photographer. As per Finance Act, 1994, the photography service was brought within the service tax net with effect from 16.7.2001 and the definition of the said services included any professional photographer or any person engaged in the business of rendering service relating to photography. The departme

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photography service was expanded with effect from 1.5.2006 covering any person providing photography service. Prior to 1.5.2006 only professional photographer or a commercial concern providing such service is covered under the definition of photography studio or agency. The appellant being a person who has only the skill of taking photography cannot be described as a professional photographer or a commercial concern. He used to get orders from various companies and also make advertisement films for such work. He picturises the events for which he gets paid by way of cheque. Since the appellant has no studio and not being an agency, there is no liability to pay service tax. The ld. counsel also argued on the ground of penalty. He submitted that the appellant since was not having any studio and was doing the photography on his own, was under the impression that he is not liable to pay service tax and therefore had not discharged any service tax. It was his bonafide belief that he was no

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e. For better appreciation of the issue, relevant sections are reproduced as under:-
“Section 65(79) of the Finance Act, 1994
Photography Studio or Agency means any professional photographer or a commercial concern engaged in the business of rendering services relating to Photography.
Section 65(105)(zb)
The taxable service is a service provided or to be provided to a customer by a photography studio or agency in relation to photography in any manner
Section 65(78)
Photography includes still photography, motion picture photography, laser photography, aerial photography or fluorescent photograph”
6. As seen from the provisions of law extracted above, photography studio or agency means any professional photographer or a commercial concern engaged in the business of rendering service relating to photography. Undisputedly, the appellant is engaged in doing advertisement film and such other activities. He also renders service in the cinematographic field. A person who renders s

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erated with the department and has furnished all details. No unaccounted transactions were unearthed. On these facts, the penalty imposed under section 78 is unwarranted. Taking into consideration these facts and that the appellant had entertained a reasonable view as to whether he would fall within the definition of photography service as he was not having any studio for rendering taxable service and taking into consideration the bonafide belief of the appellant, we are of the considered view that the penalty imposed under section 78 is unwarranted and is set aside by invoking section 80 of the Finance Act, as it stood during the relevant period.
8. From the above discussions, the impugned order is modified to the extent of setting aside the penalty imposed under section 78 only without interfering with the rest of the order. The appeal is partly allowed in the above terms, with consequential relief, if any.
(Operative portion of the order was pronounced in open court)
Case laws

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M/s. Aviram Knitters Versus Commissioner of GST & Central Excise Coimbatore
Service Tax
2019 (2) TMI 92 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-11-2018
Appeal No. ST/126/2011 – Final Order No. 43021/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri M.N. Bharathi, Advocate for the Appellant
Ms. T. Usha Devi, DC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellant had engaged overseas commission agents for procuring orders for their products namely 'Hosiery Garments'. They were paying commission to such foreign agents. On investigation, it was found that they had not paid the service tax on the commission paid to f

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Tribunal in the case of Texyard International Vs. Commissioner of Central Excise, Trichy – 2015 (40) STR 332 has held that levy of service tax cannot sustain in view of the exemption as per the notification. He also relied upon the decision in the case of M/s. KPR Cotton Mills Pvt. Ltd. Vs. Commissioner of Central Excise – 2018-TIOL-433-CESTAT-MAD.
3. The ld. AR Ms. T. Usha Devi supported the findings in the impugned order.
4. Heard both sides.
5. The similar issue as to the demand of service tax for services of overseas commission agents for procurement of orders was analyzed by the Tribunal in the case of Texyard International (supra). The Tribunal in the said case observed that the assessee is eligible for exemption of the Notificati

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Commissioner of GST & Central Excise Puducherry Versus M/s. Magic Hour Films India Pvt. Ltd.
Service Tax
2019 (2) TMI 211 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-11-2018
Appeal No. ST/99/2012 – Final Order No. 43016/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri K. Veerabhadra Reddy, ADC (AR) for the Appellant
None for the Respondent
ORDER
Per Bench
Brief facts are that the respondents are engaged in providing taxable services like advertising agency service, photography service etc. and are registered with the department. Based on intelligence that the respondents have delayed in paying service tax, investigations were conducted.

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here was much delay in paying the service tax and therefore the Commissioner ought not have to waived the penalties.
3. None appeared for the respondent though repeated notices were issued to them.
4. After hearing the ld. AR for the department and after perusal of the records, the appeal is taken up for disposal.
5. It is seen that the respondent has paid up the entire service tax along with interest of Rs. 4,52,248/- under GAR challans dated 20.3.2011, 23.3.2011 and 28.3.2011. The show cause notice is issued much later that is on 21.6.2011. It is seen that the respondent has discharged the entire service tax liability along with interest before issuance of the show cause notice. As per sub-section (3) of Section 73, as it stood during

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In Re: Esprit India Private Limited, Gurugram
GST
2019 (2) TMI 1005 – APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA – 2019 (22) G. S. T. L. 144 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA – AAAR
Dated:- 22-11-2018
HAAAR/2018-19/02
GST
AMIT KUMAR AGRAWAL AND MANORANJAN KAUR VIRK, MEMBER
Appellant Represented by: Sh. Nitin Agrawal, Power of Attorney Holder, M/s. Esprit India Pvt. Ltd.
Department Represented by: Sh. Amreshwar Gautam, Asstt. Commissioner Sh. S.K. Saini, Jt. Director(Legal)
Order under Section 101 of the Central Goods and Services Tax Act, 2017/the Haryana Goods and Services Tax Act, 2017.
The present appeal has been filed under Section 100 (1) of the Central Goods and Services Tax Act, 2017/the Haryana Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and HGST Act respectively”] by M/s. Esprit India Private Limited [hereinafter referred to as the “Appellant”] against the Advance Ruling No. HAR/

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s entered into an agreement dated 18.07.2016 with Esprit India Pvt. Ltd. in terms of which Esprit India Pvt. Ltd. has undertaken to provide various sourcing support services to EDCFE in relation to performance of the obligations under EDCFE's contract with Esprit Germany.
3. Under the agreement, Esprit India Pvt. Ltd. is appointed by EDCFE to provide services to EDCFE in relation to goods and merchandise including wearing apparel, shoes & accessories and fabric. A brief description of the functions/responsibilities of EDCFE and Esprit Germany and Esprit India Pvt. Ltd. is listed below:
Sr.No.
Functions/Activities
Role of EDCFE/Esprit Germany
Role of Esprit India
1.
Market research
No role
Esprit India conducts market research to understand market dynamics, gather pricing information from different suppliers and advise on the best available combination of price, quality and delivery of the goods for Esprit Germany.
2.
Purchase of goods and trademark protection
Esprit Germany

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in respect of goods sourced from India
Esprit India only communicates the terms and conditions to the extent of instructions and requirements received from Esprit Germany (through EDCFE) but is not involved in negotiation.
5.
Inspection and quality control
Esprit Germany and EDCFE frame guidelines for quality control procedures to be adopted during manufacturing, stock keeping in warehouse and transportation.  
Esprit India based on the guidelines received from EDCFE conducts quality checks at various stages of production. It also checks whether the goods meet the specification, quality, delivery time, and other requirement of Esprit Germany.
6.
Logistics
Products are dispatched by the suppliers to Esprit Germany.
Esprit India makes logistics arrangement for the goods in accordance with the instructions of Esprit Germany received through EDCFE and assure that all documents related to shipment of the goods Esprit Germany are proper.
7.
Contract conclusion
No role
Espri

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different categories.
C. The Ld. AAR had arbitrarily and erroneously held that the questions asked by the Appellant were out of the scope of the Section 97(2) of Central Goods and Services Tax Act 2017 (CGST Act) /Haryana Goods and Services Tax Act 2017 (HGST Act) and the questions could not be taken up by the AAR due to lack of jurisdiction.
D. Services provided by the Appellant were not 'intermediary' services.
* The Appellant in no manner 'arranged' or 'facilitated' sale of Goods from vendors in India to Esprit Germany
* The Appellant does not qualify as an 'agent' or a 'broker' for EDCFE
E. The services performed by the Appellant are in nature of “support services”
F. Services in the present case are indeed exported. Services provided by the Appellant would qualify as 'exports' in terms of Section 2 (6) of Integrated Goods and Services Tax Act 2017 (the IGST Act).
G. The remuneration of the Appellant for support services to EDCFE is independent of purchase of goods by Esp

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ant pleaded that his services fall in the ambit of export services treating the same as zero rated supply of services.
In support of his arguments, Sh. Nitin Agrawal has referred to following judgments of the Hon'ble Courts and the decisions of the Authorities under the Goods and Services Tax Act:-
1. CST v. Ernst & Young Pvt. Ltd., 2014 (34) S.T.R. 3 (Del.) = 2014 (2) TMI 1133 – DELHI HIGH COURT on 25-February 2014.
2. Commissioner of Service Tax, New Delhi v. Menon Associates (2015 77 VST 168 Del.) = 2014 (11) TMI 970 – DELHI HIGH COURT
3. Commissioner of Service Tax, New Delhi v. Menon Associates (2015 77 VST 168 Del.) = 2014 (11) TMI 970 – DELHI HIGH COURT
4. Sunrise Intermediary services-case law.
5. ARA ruling Global Reach Education [2018-VIL-06-AAR] WB 2017-18-02 (West Bengal) = 2018 (4) TMI 808 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL
6. AAR ruling Gogte Infrastructure Development Corporation Ltd. (2018-VIL-30-AAR-02) Karnataka. = 2018 (5) TMI 759 – AUTHORITY FOR ADVA

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of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.”
To controvert the cited authorities of other States, it is pleaded by the department that the same are not binding on the appellant and in support of this argument, the provisions of Section 103 have been refereed to, which read as under:-
“103. (1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only-
(a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling.
(b) on the concerned

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ng questions :-
(i) Taxability of above stated services provided by Esprit India to its associate concern in Hong Kong EDCFE under GST regime.
(ii) Whether the above stated services provided by Esprit India are covered under Export of Services having Zero rated taxability.
(iii) Whether Esprit India is eligible for seeking refund of GST for the taxes paid on input services or goods or both.
The Id. AAR has answered all the Questions raised, in term of relevant provisions of the GST Act and by giving detailed reasons. The plea of the appellant, that the AAR has given SAC & description alongwith tax rate which was not asked for, does not hold water because AAR has clarified each and every aspect raised in the application for Advance Ruling by giving self-explanatory findings. Thus the arguments raised by the appellant are untenable.
The case laws cited by the appellant are distinguishable as the facts and circumstances of the present case are different. The appellant has himself adm

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Seeks to provide taxpayers whose registration has been cancelled on or before the 30th September, 2018 time to furnish final return in FORM GSTR-10 till 31st December, 2018
1054/2018/10(120)/XXVII(8)/2018/CT-58 Dated:- 22-11-2018 Uttarakhand SGST
GST – States
Uttarakhand SGST
Uttarakhand SGST
Government of Uttarakhand
Finance Section-8
NOTIFICATION
November 22, 2018
No. 1054/2018/10(120)/XXVII(8)/2018/CT-58 – WHEREAS the State Government is satisfied that it is expedient so to

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Catering Services Under B2B and B2C Models Classified Under Clause (i) of Notification No. 11/2017, As Amended.
Case-Laws
GST
Classification of services – catering services provided by the Ap

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Profiteering Allegations Dismissed: Price Reductions on 'Bathing Bar' and 'Instant Drink Powder' Exceed ITC Benefits.
Case-Laws
GST
Profiteering – 'Bathing Bar' and 'Instant Drink Powder 50 G

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Detailed analysis of the ambit and scope of clause (d) of sub-section (5) of section 17 of the Central Goods and Services Tax Act, 2017 [CGST Act]
By: – RameshKumar Patodia
Goods and Services Tax – GST
Dated:- 21-11-2018

Goods and Services Tax, commonly known as “GST”, is a multi-stage consumption-based value added tax levied on the supply of goods and services and most acclaimed tax reforms of the century which was brought into effect from the 1st day of July '2017 upon enactment of various State and Central GST legislation for which the roadmap was laid by the Constitution (101st) Amendment Act, 2016.
The GST replaced the existing multiple cascading taxes levied both by the Centre and the State and all powerful GST Council was assigned the task of Implementation of the law. The Council prescribed five tax slabs for collection of tax viz. 0%, 5%, 12%, 18% and 28% including various rules and regulations.
The rationale behind introduction of GST is laid down in the Raj

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nd the GST council with the avowed objective of effective implementation has had multiple meetings and in each of these meetings various issues arising upon the implementation has been addressed though multiple issues still remain.
While no doubt it would take years for the GST law to become perfect in view of the diverse nature of the Country with several prominent sectors, Real Estate Sector is one of the sectors of the country which is gripping with multiple issues of falling sales, rising cost of inputs, labour issues, income-tax issues etc. One prominent issue which is hotly debated across the country as far as real estate sector is concerned, is the Issue of allowability of input credit towards inputs and input Services used in the construction of a Shopping complex, Mall and/or office complex. The general consensus amongst the various stakeholders seems to be that such input credit is not allowable in view of the express provisions as contained in Section 17(5)(d) of the CGST A

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rimarily, it is to be noted that Section 16 of the CGST Act, 2017 (hereafter referred to as Act) deals with the 'Eligibility and Conditions for taking Input Tax Credit' wherein sub section (1) states that “every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner as specified in section 49, be entitled to take credit of input tax charged on supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person”.
On reading of the above stated provision, it is clear that subject to certain conditions, every registered person is eligible to take credit of input taxes charged on the supply of goods or services or both to him provided the goods or services –
i) are used; or
ii) Intended to be used in the course or furtherance of his business
Provisions of Section 17(5)(d) of the CGST Act
Howe

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ot eligible for being taken as credit.
Meaning of the phrase “on his own account”
Now a question arises is – what is the meaning of the phrase “on his own account”. The CGST Act nowhere defines the said phrase and therefore ordinary meaning of the said expression has to be taken. The plain and simple meaning of the said term would be “for his own purposes”. The phrase “on his own account” cannot be taken to refer to a situation where any taxable person who is engaged in any business or profession and uses the goods or services or both on his own account. This is because immediately after the phrase “on his own account”, the words “including when such goods or services or both are used in the course or furtherance of business” is written. Apparently if the meaning of the phrase “on his own account” is deemed to be wide enough to cover every situation of business or commerce including the situation where a real estate company is intending to utilise the Immovable property for the purpo

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when utilised by any person 'on his own account' unless the input tax credit is used or intended to be used in the course or furtherance of business. Therefore, what is not allowed by section 16(1) cannot be said to have been restricted via Section 17(5).
Rationale behind introduction of the provisions as contained in Section 17 of the CGST Act
Now it is to be seen as to what is the rationale behind introduction of the provisions as contained in Section 17 of the CGST Act which starts with the heading ” Apportionment of credit and blocked credit. The first four sub-sections of section 17 viz. sub-section (1) to (4) deals with the situation where the credit is apportioned between eligible and ineligible credit depending upon the utilisation of the goods and services for the purpose of any business and the other purposes and it is Section 17(5) which deals with the cases relating to the blocked credit where the input tax credit is blocked in certain situations as contained in the said

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Act
The general rule of interpretation is that there should not be additional inclusion of words while interpreting the provisions of a statute. The provisions must be construed strictly on the basis of plain language used by the legislature.
It is also well-settled principle of law that at first one has to apply "literal interpretation" and only in cases of absurd results, one has to apply "purposive interpretation”. It is well settled law that while interpreting a statute the basic principle of literal rule of interpretation has to be followed (See B. Premanand and Ors. v. Mohan Koikal and Ors. reported in 2011 (3) TMI 1590 – SUPREME COURT .
The relevant portion of the said decision is as follows:
"9. It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is the literal rule of interpretation. The other rules of interpretation e.g. the mischief rule, purposive interpretatio

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ty “which is intended for re-sale” or seeks to block input credit in respect of an immovable property “which is intended for the purposes of leasing out”. The said interpretation will be patently against the decisions of the Apex Court cited hereinabove and will result in an absurd situation where a company which is engaged in the construction as well as rendition of Real Estate services will be denied the input tax credit in all cases since primarily a real estate company is expected to be engaged in the selling of the properties or renting of the properties and the property in such a situation may be constructed by it on its own account as it is not expected that a real estate company will know in advance the purpose for which the construction is being done i.e., for the purpose of sale or for the purpose of renting out and till such time, the decision is made whether the company will sell or rent out, the construction will always be on own account and therefore if the interpretation

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under construction property and the constructed property. Though the GST Council did not deal specifically with the issue at hand but what is to be seen is that there are disputes in the manner of taxation of real estate sector while implementing the GST Law.
In the light of the discussion hereinabove, it can be safely concluded that the phrase “own account” by any stretch of imagination cannot be interpreted to mean that it covers a situation where the property is intended to be leased out. It is not permissible to assume or intend when the intention of the law makers is very clear. Even if the purposive interpretation is applied, from a simple reading of the provisions as contained in Section 17 , it is apparent that in a situation where a movable asset after purchase is rented out then there are express provisions in Section 17 to allow the Input tax credit on purchase of the movable asset against the output taxable supply of the renting of the movable asset and thus it cannot be

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hat the literal construction of a situate must be adhered to unless the context renders it plain that such a construction cannot be put on the words in question- this is what is stated in Webster's third new International Dictionary:
“Land, buildings, machinery, apparatus and fixtures employed in carrying on trade or other industrial business”
The said decision of the Apex Court was considered by Hon'ble Allahabad High Court in the case of CIT Lucknow-II Vs Kanodia Warehousing Corporation reported in 1979 (11) TMI 97 – ALLAHABAD HIGH COURT and the Hon'ble Court observed as follows:-
In order to find out if a building or a structure or part thereof constitutes “plant” the functional test must be applied. It must be seen whether the subject matter involved, that is, the building or structure or part thereof, constitutes an apparatus or a tool of the tax payer or whether it is merely a space where the tax payer carried on his business. If the building or structure or part thereof is so

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t and machinery” and “plant or machinery” cannot be taken to mean the same thing and the definition of the phrase “plant and machinery” as given in the explanation in our opinion can be applied in Chapter V and VI only where the phrase “plant and machinery” has been used and not where “plant or machinery” has been used. In this regard, it may be noted that the word “or” is normally disjunctive and “and” is normally conjunctive but at times they are read as vice versa to give effect to the manifest intention of the legislature as disclosed from the context. One does sometimes reads “or” as “and” in a statute but one does not do it unless you are obliged because “or” generally does not mean “and” and “and” does not generally mean “or”. Where provision is clear and unambiguous, the word “or” cannot be read as “and” by applying the principles of reading down (See Principles of Statutory Interpretation 13th edition 2012 Page No 485-486).
In the instant case, while section 17(5)(c) of the A

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e) dated 28-06-2017 prescribes the rate of Central Tax in respect of different kinds of supply of services wherein the rate in respect of supply of renting of immovable property service has been prescribed under heading No. 9972 (Real Estate Services) as 18% (CGST and SGST).
Also, the said notification contains a table wherein in Column No. 5 restrictions in respect of utilisation of input tax credit have been prescribed in respect of certain kinds of supply of service but no such restrictions have been prescribed therein in respect of renting of immovable property service taxed under the heading Real Estate Services.
In this regard it is pertinent to note that while prescribing different bands of tax rate in respect of GST, five bands of tax rate has been prescribed viz. 0%, 5%, 12%, 18% and 28%. These bands of tax rate has been prescribed on the basis of principle that 0%, 5% and 12% is in respect of essential and needy area and also where there are certain restrictions on the allo

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lation to construction of immovable property against the output services of Renting in the erstwhile service tax legislation were specifically brought in indirectly by amending the Cenvat Credit Rules, 2004, only after catena of judgements held that the input tax paid on inputs used and construction services utilised for the construction of property used for the provision of renting services shall be allowed as cenvat credit on the pretext that renting service could not have been rendered without construction of property.
However, unlike the amended provision under the service-tax as stated herein above, there is no such express provision under the GST law.
GST law itself was introduced in order to allow seamless input credit of tax paid on input and input services used for the provision of output taxable supply and if the interpretation as being sought to be done is allowed to be done; it will be patently against the legislation itself without there being reasonable justification fo

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no need to insert the phrase at all and it was sufficient to restrict the provision to “own account”. Therefore the interpretation that the taxable supply by way of renting of the property is covered within the meaning of “own account” is ruled out, unless it is read in conjunction with the phrase including when such goods or services or both are used in the course or furtherance of business.
Now the question arises whether when one is using the goods or services or both for the purpose of construction of an immovable property, can it be said that such goods or services or both are used in the course or furtherance of business. It is not so. The goods and services when used for the construction of an immovable property directly, they cannot simply by such usage be said to have been used in the course or furtherance of business. If the intention of the law makers was to restrict the credit in case the immovable property was used in the course or furtherance of business, then the law ma

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ne of the reasons given by putting this sector in the normal tax bracket of 18% by saying that the sector is now eligible for the input credit in respect of the supply of materials like cement, steel etc.
The business of a Real Estate player can be that of construction for sale, renting, leasing, time share and others. All these businesses are inextricably linked and it is difficult to carve out one from another and the analysis of the provisions has to be therefore done in the light of this.
The plain and simple interpretation of the said phrase can be to say that the said phrase seeks to disallow the input tax credit when the goods or services or both are used in the course of any business i.e., where the immovable property is used as a space for the purpose of running the business.
Recently, one writ petition has been filed in Karnataka High Court on this issue and is awaiting the judgement.
Conclusion:
Across the globe, in similar situations VAT on construction cost is eligibl

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